My Tradewinds

Newbuilds unlikely as LNG Croatia puts price cap on regas unit

Prospective importer LNG Croatia has set a maximum price on its planned floating, storage and regasification unit that effectively rules out the use of newbuildings.

Those working closely with the project reveal that a cap of between $120m and $130m has been specified for an FSRU of around 145,000 cbm or larger.

They say the development body has also specified that providers need to take an equity stake in the unit, which is to be sited off Krk Island in Sepen Bay.

Both Excelerate Energy and Golar LNG are understood to be hotly competing for the business.

Speaking about the FSRU sector in its recent results briefing, Golar chief executive Iain Ross said LNG carrier-to-FSRU conversions are of more interest to the company than newbuildings. Golar has two existing units that are currently without regas business.

Excelerate operates nine existing FSRUs, the bulk of which are smaller than modern newbuildings that may fit the Croatian requirement.

Last month, Croatia LNG, which parachuted in a new managing director, retendered for an FSRU — cancelling a tender that had been running for several months in a bid to cut capital costs for its project and reduce its regas capacity.

Companies were due to submit their bids at the end of last week.

Under the earlier tender, the developer had been seeking a 160,000-cbm FSRU to supply gas to domestic and local markets.

Hoegh LNG and MOL were tipped as the lead bidders, and a decision was expected on a provider in April.

The retender is the latest twist in Croatia’s long-running search for an FSRU, which has been ongoing for several years. It was given what appeared to be a decisive boost when the project received European Union financing last year.

However, this specified that the cash must be spent on the FSRU, which needs to be in operation by the end of 2019.

A parallel process to select a contractor to undertake the engineering, procurement and construction work has been cancelled. A new tender for this business is expected to be issued.

Newbuilds unlikely as LNG Croatia puts price cap on regas unit

Newbuilds unlikely as LNG Croatia puts price cap on regas unit

Prospective importer LNG Croatia has set a maximum price on its planned floating, storage and regasification unit that effectively rules out the use of newbuildings.

Those working closely with the project reveal that a cap of between $120m and $130m has been specified for an FSRU of around 145,000 cbm or larger.

They say the development body has also specified that providers need to take an equity stake in the unit, which is to be sited off Krk Island in Sepen Bay.

Both Excelerate Energy and Golar LNG are understood to be hotly competing for the business.

Speaking about the FSRU sector in its recent results briefing, Golar chief executive Iain Ross said LNG carrier-to-FSRU conversions are of more interest to the company than newbuildings. Golar has two existing units that are currently without regas business.

Excelerate operates nine existing FSRUs, the bulk of which are smaller than modern newbuildings that may fit the Croatian requirement.

Last month, Croatia LNG, which parachuted in a new managing director, retendered for an FSRU — cancelling a tender that had been running for several months in a bid to cut capital costs for its project and reduce its regas capacity.

Companies were due to submit their bids at the end of last week.

Under the earlier tender, the developer had been seeking a 160,000-cbm FSRU to supply gas to domestic and local markets.

Hoegh LNG and MOL were tipped as the lead bidders, and a decision was expected on a provider in April.

The retender is the latest twist in Croatia’s long-running search for an FSRU, which has been ongoing for several years. It was given what appeared to be a decisive boost when the project received European Union financing last year.

However, this specified that the cash must be spent on the FSRU, which needs to be in operation by the end of 2019.

A parallel process to select a contractor to undertake the engineering, procurement and construction work has been cancelled. A new tender for this business is expected to be issued.

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